KeNo's Housing and Economic Portal: Monday December 19 Housing and Economic stories

Sunday, December 18, 2011

Monday December 19 Housing and Economic stories

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Soros: World Financial System on Brink of Collapse - (online.wsj.com) The world financial system not only isn’t functioning, it’s on the brink of collapse, according to investor George Soros. The Hungarian-born philanthropist, who recently spent time in areas where his charities are active, such as Africa, said he sees a growing bifurcation between emerging and developed countries – and he’s more confident about prospects for the emerging ones. Despite their assorted problems, including corruption, weak infrastructure and shaky government, developing countries are relatively unscathed by the “deflationary debt trap that the developed world is falling into,” Mr. Soros said at a New York gathering to mark the 10th anniversary of the International Senior Lawyers Project, a group that provides pro bono legal services around the world. Mr. Soros was among those honored by ISLP, for his work as founder and chairman of the Open Society Foundations, which supports democracy and human rights.

U.S. Postal Service Seeks to Slow Mail Delivery - (www.bloomberg.com) The U.S. Postal Service, which is trying to cut $20 billion in operating costs by 2015, is seeking to slow mail delivery to help save $2.1 billion a year. The service is asking the Postal Regulatory Commission to let it relax delivery standards for first-class mail, which includes letters and bills, David Williams, vice president of network operations, said today at a news conference in Washington. Slowing mail delivery would reduce the number of mail-processing plants the Postal Service needs, Williams said. The service said in September it was considering loosening delivery standards and closing 252, or more than half, of its mail-processing plants. The agency said last month it expects a $14.1 billion loss in 2012 as mail volume continues to drop.

Fed may give loans to IMF to help euro zone: paper – (www.reuters.com) The Federal Reserve, along with the 17euro zone national central banks, may help provide the International Monetary Fund with funds that could be used to aid debt-ridden states, a German newspaper said. Die Welt cited sources close to the negotiations as saying the euro zone central banks could pay at least 100 billion euros ($134.2 billion) into a special fund that could be used for programs for nations struggling to control their debts. "Also other central banks, for example the U.S. Federal Reserve, are apparently prepared to finance a part of the costs," the paper said in an advance copy of an article to appear on Monday.

Monti’s Austerity Debut Risks Italian Wrath - (www.bloomberg.com) Prime Minister Mario Monti is asking Italians to swallow 30 billion euros ($40 billion) in additional emergency economic measures even as the nation’s fifth recession in the last decade looms next year. Monti, whose Cabinet approved the package yesterday, is due to present the plan to the legislature at 4 p.m. in Rome, with Parliament voting on it in the coming weeks. The premier has vowed “shared sacrifices” to cut the euro area’s second- biggest debt and regain investor confidence after Italian borrowing costs topped the 7 percent that led Greece, Ireland and Portugal to seek aid. Italy’s 10-year yield declined 52 basis points to 6.16 percent, its biggest drop in four months.

Here's The Central Bank Conspiracy Theory That Art Cashin Just Explained On CNBC - (www.businessinsider.com) The new thesis in the watering holes seems to tie up the loose ends. It has to do with our old friends, the U.S. money market funds. You will recall that the money funds got caught holding Lehman preferred when it collapsed. That led to a freeze in the commercial paper market and almost brought the U.S. economy to its knees. The new theory says that several U.S. money market funds have short term loans out to European banks. That paper is said to be coming due in graduated amounts over the next 40 to 50 days. It must be repaid in dollars. So, the thesis goes, the Fed saw imminent danger and rushed to make sure plenty of dollars were available and at a cheaper rate. The peanuts and pilsner crowd think the pressure point may have been in France.